Higher Rate with shorter Minimum Stay vs Lower Rate with longer Minimum Stay

[Melissa1881]

Hello,

I am very new to hosting.  I own a property near Cape Cod but not in Cape Cod proper,  that is 3 houses down from a small beach and less than 5 min walk to a really amazing beach.  It is a beautiful Victorian house that was renovated - 3 beds, 2 bath, 1 fold out couch. All new furniture and premium bedding including a Tempur-Pedic mattress.  However,  I am noticing other homes in the area are already booked for the whole summer.  Thus far, I have one booking for 3 nights.  I require a 3 night minimum.  

One home in the area is quite different than mine.  Private beach, room for 20, 2 pets, small event hosting such as weddings.  $10k per night and literally booked the entire summer with 7 night minimum stay.  I was shocked that they would be booked the entire summer with the 7 night minimum at 10k per night.  I could see 4 nights but was shocked to see 7 nights working for this.  

Another home is compatible to mine in terms of location.  They have 4 beds and only one bath.  They are also booked the entire summer with a 7 night stay minimum.  Their rate is probably 15 - 20% less than mine, the house is not nearly as nice though. The owner also rents directly (skipping 3rd party platforms).

There is a local Facebook group and both of these properties generated a ton of interest.  Mine only a few comments such as "nice house" or "like your website" but not the interest or bookings that I was hoping for.  

So my question is, have others found greater success with requiring the 7 night minimum and lowering rates or keeping rates the same?  I am starting to panic because if I don't get decent bookings this summer, I will be seriously underwater  - especially considering the amount of money I put into it (furnishings etc). Any recommendations would be appreciated. 

Here is my airbnb listing https://www.airbnb.com/rooms/699258209535536371 and I have a website I created for the property

 https://onsetbeachcottage.com/ 

[Mike-And-Jane0]

@Melissa1881 If I were you I would use rulesets in pro tools to set a 7 night minimum and a specific change over day for the Summer high season. Don't worry too much about not being booked yet - there are plenty of disorganised people out there.

Ideally you need near term bookings to give you reviews. Until you have a track record you probably need to be priced 5 or 10% lower than competitors. Also remember the rates you look at not are those from hosts who haven't got bookings so may be priced high themselves.

[Melissa1881]

Thanks Mike and Jane, I think you are right. The reviews are the important thing to get now before going into the summer season.  Even if I have to lower rates, it is better than being vacant

[Huma0]

@Melissa1881 

I think @Mike-And-Jane0 is probably right in that you need to get more reviews under your belt. At the moment, the property only has one, and therefore no star ratings are shown yet (I think you have to get three reviews before you see the stars, but I might be wrong) if you are competing against established and highly rated airbnbs.

I understand this might be difficult if you are in a very seasonal area that relies on summer bookings. Can you think of reasons guests might book with you in the winter and spring? Is there a different audience you could be targeting for those months?

[Melissa1881]

Thanks for the response.  It is lovely place to visit in the spring and fall shoulder season. You get all the benefits of Cape Cod without the crowds.  Because I live out of state, the property is managed by Vacasa.  So I have 5 thus far, but unfortunately they are spread out.  2 on Vacasa, 2 on Vrbo and one on Airbnb! Vacasa discourages me from sharing a direct link to the listing on Airbnb.  They say each time someone views the property and does book it, the listing drops in the search results due to the algorithm.  Yet I feel it is important to establish a reputation here.  Uggh.  Did not think it would this hard starting out.  I fell in love with property and thought everyone else would too!

Melissa

[Huma0]

@Melissa1881 

Sorry, I am confused. Vacasa told you that each time someone views the property on Airbnb and books it, you drop in the search results? Did you mean each time someone views and DOESN'T book it?

[Melissa1881]

Sorry yes, that is typo.  I mean to say when someone does NOT book it after viewing. 

[Fred13]

Lovely home, and probably it is only a matter of time before you will start renting consistently. Perhaps all you need is some 'marketing' ideas to get really started. My listings is a far departure from yours, but how to sell something I can identify with.

The first order of business is to get reviews, any reviews. Having a minimum of 3 days is a plus in my book, since that excludes less people (like weekenders) than a 7-day minimum (vacation guests), though at first it will cause more work on your part (in turnover preparation/costs). The price to be paid, at first however. This is no time to go head-to-head against those well ahead of you.

Price: I would start at $199 a night for 2, and add 'X' amount for each couple after that. I am no fan of the same price being charge for '1 - X' price structure which tends to encourage say 2 persons to book to then start dragging 'friends' in for the sole purpose of cutting down the price. Usually 'add-ons' are not as good a fit as guests that booked a place, unless they where scouts for a group looking for 'cheap' places. Besides when only 2 come to '1-X' price structures, they will feel they are paying for a lot 'wasted space'.

Selling the sizzle: What you want to convey is 'Come to Cape Cod' to a lovely place at a great price. Oftentimes the less you explicitly show (or tell), the better; besides you are not selling a 'neighborhood', but your place only. Your approach right now is one that is indeed 'factual' (aka 100% honest, commendable of course) no doubt, but leaves little to the imagination. Best not to be so explicitly where the house is, with so many close-by neighbors, I do not think that is a plus, but a negative. I would not assume the visitor may not care, humans trying to 'get away' may indeed mind.  Perhaps best to replace most of those 'neighborhood' photos with what cool places and things to do nearby are available to visit if someone  books your place.

Never panic. I know its never easy, but always best to put all energies on learning and improving. There is not a day I do not spend some time on how to do better via copying from the successful  since I assume they know more than I, even after they have proved for the 100th time beyond a shadow of a doubt they may not. You have made a chancy investment, all focus should be now on how to make it work for you.

Good luck, something we all could use really. 🙂

[Melissa1881]

Thanks Fred, I think you are right about the photos.  Though the house is lovely, the photos are not.  In fact I am paying to have them redone.  But I like the idea of showing more "fun things to do" photo and reducing the number of outdoor pics of the house.  Do you know this is my second set of photos.  The first time the photographer came on cloudy day.  Imagine trying to show a coastal property in the rain!!  As you say, keep some of the mystique.  I like that!

[Lorna170]

@Melissa1881   With a larger home in a traditional vacation location, the more you appear to be "valuable and exclusive" the better your rental prospects will be.

Your prospective clients probably rent for a week at a time.  Saturday to Saturday in most beach locations.  Follow the pattern.  Offer a small discount for 2 week rentals.  Interesting point:  the higher my nightly rate is in comparison to my competition, the more likely it is that my property is booked.  

Limit the number of guests to only those that can be accommodated in a bed.  Remove the mention of the fold-out couch.  You want quality guests, not the ones that are shoe-horning in every member of their extended family.  Bargain hunters are not good guests.

It will take some time to build up the reputation and advertising clout of the properties that you mentioned.  Have you talked to a local realtor to see what they can do to get you booked for the season? You need to have ad exposure.  Being underwater in the first year is not unusual.  My larger properties took at least two years before I was rented in excess of 250 nights.

[Melissa1881]

Thanks Lorna!  Since I live out of state, I use a company called Vacasa to manage the property.  They are supposed to do the marketing etc but don't think they are doing a very good job.  In fact the photos are horrible and looked "stretched out".  I am going to pay out of pocket to have news ones taken.  Though they manage the property, I can set the price.  Not the fees of course but the price.  I thought it was interesting what you mention about when you set your rate higher, that you get more bookings.  And about the fold out couch as well.  What would you recommend in terms of ad exposure?

[Colin519]

Hi Melissa, 

I would HIGHLY recommend reaching out to me. Vacasa is terrible, and I genuinely mean that. I’m short their strategy is as follows, part 1, is simply quantity (sign on as many properties as possible) over quality (regardless of the growing pains induced AKA extremely lack luster management). They’ve leaned into this more than ever now that they’ve gone public. Part  2 of their strategy is preying on new clients lack of knowledge surrounding STR’s, and they do this through extremely complicated payment structures. Instead of just a flat percentage based management fee (of which is already an unfair split), they shotgun spray client contracts with a robust system of various fees & “services” that they charge guests for and keep for themselves. THIS IS NOT NORMAL! Charging guests for extra services and amenities is a great way to boost income and I do it for my clients. HOWEVER, this income should be treated the same way nightly rates are treated, meaning it’s split according to the agreed upon management percentage cut. This is not to mention the allure of their $100 emergency expense coverage, of which is literally laughable. I need to wrap this up being that it’s way longer than I intended, but I’ll also warn you of this: Pay close attention to what they charge you for maintenance and repairs, as you’ll quickly notice the insane premium you’re paying for something as simple as screwing back in the hinge of a cabinet door that was pulled loose by a guest. Why am I being so specific with my example? I have 2 clients who used to have Vacasa manage their properties, and the $350 charge for the above repair is just one of the many head scratching examples that I’ve heard from what they went through while working with Vacasa. This is surely a message meant to hopefully entice you to reach out to me and consider my management services, however don’t let that cloud everything I just said. At least let it service as a push to take action and avoid the nightmare that is Vacasa.

With all that being said, I encourage  you to give me even just 5minutes of your time. I’ll show you real market data, where my gross income figures for every single property I manage, out performs their respective Vacasa managed comparables, from 25% to as high as 40% (Again I will show you the literal metrics as plain as day, not to account for the difference in reviews….I average a 4.91 star rating across the board). I’ll put my money where my mouth is too, I’m always willing to include in my contracts that if I you don’t profit 10% higher than what you were earning while being managed by vacasa, I don’t get paid a dime This structure basically guarantees that you will be cash flow positive, being that in any given month if you aren’t, you keep my property management fee to cover the deficit and maintain consistent earnings. 

Thank you for reading this. If you don’t reach out to me, at least find another mom & pop to support. Not only do you help yourself, but you give back to individuals directly and not the massive conglomerate that is Vacasa.

Sincerely,

Colin S. (I’m happy to provide my full name privately, just rather not on the public forum.) 🤠🫡